Sen. Jay Rockefeller, D.-W. Va., filed legislation as promised seeking to force cruise lines to pay more U.S. taxes.
Although they have headquarters in Miami-Dade, the world’s largest cruise ship companies are incorporated in foreign countries, which means they are not subject to U.S. federal income tax because of an exemption in a section of tax code that applies to cruise lines.
Rockefeller, who chairs the U.S. Senate Committee on Commerce, Science & Transportation, warned during a hearing last week that he had legislation in the works to close that tax loophole. Thursday, he introduced bills that would eliminate the tax exemption for cruise lines and impose a 5 percent excise tax on gross income if passengers get on or off a ship in the U.S. That excise tax money would go to improve transportation infrastructure.
“The cruise industry can’t operate for free here in the U.S.,” Rockefeller said in a press release. “It costs money to send the Coast Guard to tow their drifting ships and it costs money to maintain the ports they use. Cruise lines need to start paying their fair share of taxes and stop expecting everyone else to foot the bill.”
A spokesman for the Cruise Lines International Association said late Thursday that the trade group and its members were reviewing the bill.
And Carnival Corp., the world’s largest cruise ship company, said in a statement that it “pays the taxes it is legally required to pay in every country in which we do business.” The statement said that over the past five years, Carnival has paid nearly $1.2 billion to U.S. Federal, state and local agencies including port authority payments, government fees, dockage fees and payroll taxes.
The company also said it is subject to taxes and/or fees based on the guest counts, ship tonnage, ship capacity or some other measurement in “virtually all” jurisdictions where ships call on ports.